On 22nd April 2020, Daraz Founder and CEO, Bjarke Mikkelson, had an exclusive discussion with Bloomberg News.
In the conversation, Bjarke introduced Daraz as an e-commerce businesss that operates across several categories. He also mentioned that Daraz is operating in 5 Asian countries with around half a billion people. These countries include: Pakistan, Bangladesh, Sri Lanka, Nepal and Myanmar.
He then went on to talk about how the pandemic has affected the business operations. Bjarke said that some impacts are short-term while others are more long term in nature. The three main impacts he identified were:
- The Physical Impact due to the lock-down and curfew situation. Although this is a short-term effect but it’s had a significant impact on Daraz deliveries. Right now, Daraz is making 60-70% of the deliveries through its own logistic companies. He also added that Daraz has been having very optimistic discussions with the Government and they expect to get stable logistics infrastructure in 1-2 weeks.
- The Work from Home situation has been a challenge for everyone. However, Bjarke said that he has been “incredibly positively surprised” with how work from home has worked out thus far. According to him, the situation has also provided a learning opportunity on how we can deploy the power of digital work-space to engage employees and improve productivity. He found this to be a positive impact.
- And lastly, the surge in customer demand for essential products.
Talking about growth witnessed by Daraz across the 5 countries, Bjarke said that Daraz’s Bangladesh business and Sri Lankan business have seen the most growth – around 200% year on year. He attributed this large growth to factors like infrastructure investments paying off, good government regulations and policies and finally, having the right team on the ground.
When asked if this situation is going to pace up the shift from offline to online, Bjarke commented that although that’s inevitable, it’s not what Daraz is fighting for right now. He said that the current fight is to make sure that the economy and businesses return to track.
“If we have a bigger share of a small pie, we know that’s not something which is good for anybody”, commented Bjarke.
He further added that Daraz’s strategy is the same as it was before the pandemic situation which it to have the largest assortment from local and international suppliers, to use their technology to create convenience, to give a fun experience on the app and to provide a high quality service across all channels.
Regarding the Alibaba acquisition, Bjarke said that it has had 3 major impacts on Daraz:
- Daraz now has a technology platform powered by Alibaba which is perhaps the best in the world. He said that setting up a small e-commerce business isn’t that hard but managing a huge marketplace with millions of customers, thousands of effective sellers and more than 20 million products is very challenging and having strong tech really helps.
- The supply chain has significantly improved and Daraz is now not only selling cross-border, but has also integrated it’s whole supply chain to efficiently deliver to the end consumer.
- Daraz can now take Alibaba’s help on dealing with challenges that may be new for Daraz, but are not new for Alibaba. Alibaba has extensive knowledge and experience in the industry and it has shown great support every time Daraz has reached out.
Finally, Bjarke said that while the Covid-19 will have short-term effects, the situation will accelerate the shift from offline to online. He said that the market is pointing in the right direction and Daraz is very optimistic to see a 100%+ growth in the coming years.